TRANSLATION:
This is an English translation of Consolidated Quarterly Financial Results (Japanese Accounting Standards) for the Fiscal Year Ending December 31, 2022. This is an English translation of the Japanese original, prepared only for the convenience of shareholders residing outside Japan. The original Japanese version will prevail should there be any difference in the meaning between the English version and the Japanese version.
Consolidated Financial Results (Japanese Accounting Standards)
for the Fiscal Year Ended December 31, 2022
February 14, 2023 | |||
Name of Listed Company: TOYO INK SC HOLDINGS CO., LTD. | Listings: | Tokyo Stock Exchange | |
Code: | 4634 | URL: | https://schd.toyoinkgroup.com |
Representative: | Satoru Takashima, President and Representative Director, Group CEO | ||
Contact: | Takeshi Arimura, Operating Officer and General Manager of Finance & Accounting Department | ||
Tel: | +81-3-3272-6002 |
Scheduled date of ordinary shareholders' meeting: Scheduled date of commencement of dividend payments: Scheduled date of submission of financial report: Supplementary documents for financial results: Financial results briefing:
March 23, 2023
March 24, 2023
March 23, 2023 Yes
Yes (for institutional investors and securities analysts)
(Amounts of less than million yen are omitted.)
1. Consolidated business results for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)
(1) Business results (cumulative totals) | (Figures in percentages denote the year-on-year change.) | |||||||||||||||
Year ended | Net sales | Operating profit | Ordinary profit | Profit attributable to | ||||||||||||
owners of parent | ||||||||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | |||||||||
December 2022 December 2021
315,927
287,989
9.7
11.8
6,865
13,005
-47.2 0.7
7,906
15,442
-48.8 23.1
9,308
9,492
-1.9 57.7
(Note) Comprehensive income: | December 2022 | 11,705 million yen (-41.2%) | December 2021 | 19,892 million yen (-%) | ||||||
Year ended | Profit per share | Profit per share | Return on equity | Ordinary profit/ | Operating profit/ | |||||
(Basic) | (Diluted) | Total assets | Net sales | |||||||
Yen | Yen | % | % | % | ||||||
December 2022 | 171.49 | 171.30 | 4.3 | 1.9 | 2.2 | |||||
December 2021 | 169.36 | 169.09 | 4.4 | 3.9 | 4.5 | |||||
(Note) Equity in earnings of | associated companies: | December 2022 -173 | million yen | December 2021 -271 | million yen |
- The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other standards were adopted at the fiscal year under review and have been applied to the results of the fiscal year ended December 31, 2022, but they have not been taken into account when evaluating year-on-year change due to the negligible impact of these standards.
(2) Financial position | ||||
Year ended | Total assets | Net assets | Net worth/Total assets | Net assets per share |
Million yen | Million yen | % | Yen |
December 2022 December 2021
411,177
406,896
227,877
226,947
53.3
53.7
4,133.90
3,911.64
(Note) Net worth: | December 2022 219,047 million yen | December 2021 218,449 million yen |
- From the fiscal year ended December 31, 2022, the Company began adopting the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc. The figures for the fiscal year ended December 31, 2022 are the figures after the application of the relevant accounting standards.
(3) Consolidated cash flow condition
Year ended
Cash flows from
operating activities
Cash flows from
investing activities
Cash flows from
financing activities
Balance of cash and
cash equivalents
December 2022 December 2021
Million yen
4,262
15,760
Million yen
-5,645-17,576
Million yen
-8,102-11,988
Million yen
53,385
60,949
2. Dividends
Dividends per share
End of Q1 | End of Q2 | End of Q3 | Year-end | Annual |
Dividends total
(annual)
Dividend
payout ratio
(consolidated)
Dividends/ Net assets (consolidated)
Yen | Yen | Yen | Yen | Yen | Million yen | % | ||||||||
December 2021 | - | 45.00 | - | 45.00 | 90.00 | 5,025 | 53.1 | |||||||
December 2022 | - | 45.00 | - | 45.00 | 90.00 | 4,794 | 52.5 | |||||||
December 2023 | - | 45.00 | - | 45.00 | 90.00 | 79.5 | ||||||||
(Forecast) | ||||||||||||||
%
2.4
2.2
3. Forecasts for the year ending December 31, 2023 (from January 1, 2023 to December 31, 2023)
(Figures in percentages denote the year-on-year change.)
Net sales
Operating profit
Ordinary profit
Profit attributable to
owners of parent
Profit per share
Full-year
Million yen
330,000
%
4.5
Million yen
11,000
%
60.2
Million yen
9,500
%
20.1
Million yen
6,000
%
-35.5
Yen
113.23
* Notes: | |||
(1) | Important changes of subsidiaries during the term (changes in specific subsidiaries accompanied by a change in the scope of | ||
consolidation): | No | ||
(2) | Changes in accounting policies and changes or restatement of accounting estimates | ||
(i) | Changes in accounting policies due to the modification in accounting methods: | Yes | |
(ii) | Changes in accounting policies other than (i): | No | |
(iii) | Changes in accounting estimates: | No | |
(iv) | Restatement: | No |
(3) Numbers of shares issued (ordinary shares)
- Numbers of shares issued at the end of the terms (including treasury shares):
December 2022: | 58,286,544 shares |
December 2021: | 60,621,744 shares |
- Numbers of treasury shares at the end of the terms:
December 2022: | 5,298,507 shares |
December 2021: | 4,775,558 shares |
- Average numbers of shares issued during the terms (consolidated accumulation periods):
December 2022: | 54,277,815 shares | |||||||||||
December 2021: | 56,049,246 shares | |||||||||||
Reference: Financial summary (non-consolidated) | (Amounts of less than million yen are omitted.) | |||||||||||
Non-consolidated business results for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022) | ||||||||||||
(1) Results of operations | (Percentages show year-on-year rates.) | |||||||||||
Year ended | Net sales | Operating profit | Ordinary profit | Profit | ||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | |||||
December 2022 | 17,751 | 7.9 | 8,019 | 22.2 | 9,536 | 21.2 | 12,945 | 142.7 | ||||
December 2021 | 16,450 | -3.9 | 6,560 | 0.9 | 7,865 | 1.3 | 5,333 | -8.3 | ||||
Year ended | Profit per share (Basic) | Profit per share (Diluted) | ||||||||||
Yen | Yen | |||||||||||
December 2022 | 238.51 | 238.24 | ||||||||||
December 2021 | 95.17 | 95.01 | ||||||||||
(2) Financial position | ||||||||||||
Year ended | Total assets | Net assets | Net worth/Total assets | Net assets per share | ||||||||
Million yen | Million yen | % | Yen | |||||||||
December 2022 | 256,097 | 168,332 | 65.7 | 3,174.94 | ||||||||
December 2021 | 260,784 | 171,030 | 65.5 | 3,059.60 | ||||||||
(Note) Net worth: | December 2022 168,233million yen | December 2021 | 170,867million yen |
- These financial results are not subject to audits by certified public accountants or audit corporations.
- Explanations about the proper use of financial forecasts and other important note
- The above forecasts are based on the information available on the date these materials are released and incorporate assumptions about uncertainties that may affect future earnings. The forecasts do not constitute an assurance that the Company promises to achieve the earnings. Actual earnings could differ materially from these forecasts due to various factors in the future. For notes about assumptions of earnings forecasts and the use of earnings forecasts, refer to "(4) Future prospects" of "1. Overview of Operating Results, etc." on page 5 of the accompanying materials.
- Supplementary documents for financial results will be posted on the Company's website on February 14, 2023 (Tuesday).
-
The Company will hold a financial results briefing for investors as follows. Reference materials for financial results and forecasts used in the briefing will be posted on the Company's website before the opening of the briefing.
- February 21, 2023 (Tuesday): Briefing for institutional investors and security analysts.
Accompanying Materials - Contents | ||
1. Overview of Operating Results, etc | 2 | |
(1) | Overview of operating results for the fiscal year ended December 31, 2022 | 2 |
(2) | Overview of financial position during the fiscal year ended December 31, 2022 | 4 |
(3) | Overview of cash flow during the fiscal year ended December 31, 2022 | 4 |
(4) | Future prospects | 5 |
2. Group Overview | 6 | |
3. Management Policy | 8 | |
(1) | Basic management policy | 8 |
(2) | Medium- to long-term management strategy | 8 |
(3) | Our challenges | 8 |
4. Basic Position on the Selection of Accounting Standards | 9 | |
5. Consolidated Financial Statements and Primary Notes | 10 | |
(1) | Consolidated balance sheet | 10 |
(2) | Consolidated statements of income and consolidated statements of comprehensive income | 12 |
(3) | Consolidated statements of changes in equity | 14 |
(4) | Consolidated statements of cash flows | 16 |
(5) | Explanatory notes to consolidated financial statements | 17 |
(Notes on assumption of going business) | 17 | |
(Basic and important matters in preparing the consolidated financial statements) | 17 | |
(Changes in accounting policies) | 20 | |
(Changes in presentation methods) | 20 | |
(Notes to consolidated balance sheet) | 21 | |
(Notes to consolidated statements of income) | 22 | |
(Notes to consolidated statements of comprehensive income) | 25 | |
(Notes to consolidated statements of changes in equity) | 25 | |
(Notes to consolidated statements of cash flows) | 27 | |
(Segment information, etc.) | 27 | |
(Per share information) | 30 | |
(Important subsequent events) | 31 | |
6. Other | 31 | |
(1) | Management turnover | 31 |
1
1. Overview of Operating Results, etc.
(1) Overview of operating results for the fiscal year ended December 31, 2022
(Million yen) | ||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | |||||
owners of parent | ||||||||
December 2022 | 315,927 | 6,865 | 7,906 | 9,308 | ||||
Growth rate (%) | 9.7 | -47.2 | -48.8 | -1.9 | ||||
December 2021 | 287,989 | 13,005 | 15,442 | 9,492 |
During the fiscal year under review, the global economy was affected by high raw materials and energy prices and supply constraints chiefly due to the prolonged state of affairs in Ukraine and restrictions on economic activities in China. In addition, there were economic slowdowns and violent exchange rate fluctuations due to worldwide monetary tightening. Meanwhile, the COVID-19 pandemic was entering a new phase in which people live with COVID-19, and there were signs of a recovery in the global economy. In the display industry, one of the main markets of the Toyo Ink Group, inventory adjustments progressed rapidly, which had significant adverse effects on the Group's corporate activities.
Amid this business environment, the Toyo Ink Group operated its business activities in line with the following three management policies.
The first policy is to strengthen the profitability of businesses. The Group was affected by the slowdown of demand across the board, reflecting a downturn following special demand in the display industry due to COVID-19, a slowdown in the automobile market due to the shortage of semiconductors, and confusion caused by COVID-19 policy in China. In response, the Group strengthened its sales network in the Chinese market to acquire new customers for its materials of color filters for LCDs. In India and the United States, the Group expanded the pressure sensitive adhesives business by expanding facilities. In Europe, the Group started the local production of inkjet inks for digital printing, for which demand is expected to expand. In Japan, the Group strove to change its profit structure and moved forward with streamlining. The Group transferred functions of the Mobara Plant to the Fuji Factory to enhance production efficiency in the Colorants and Functional Materials Related Business. The sales system in the Printing and Information Related Business was integrated into TOYO INK Co., Ltd. The Group continually revised prices and reduced costs, although it was slow to respond to rising raw materials and energy prices and surging logistics costs.
Under its second policy, creating and expanding priority development domains, the Group continued to implement business activities in the three priority domains below. In Sustainability Science, the Group continued its business activities in the four largest automobile markets for automobile lithium-ion battery materials (Europe, the U.S., China and Japan). In Europe and the United States, production started in earnest. In China and Japan, new customers were acquired. Regarding environmentally friendly products, the Group focused on expanding sales of functional coatings that contribute to the manufacturing of paper packaging materials and developing plastic colorant products that contribute to recycling. In Communication Science, the Group established a Technical Center in Shenzhen, China to establish a system for expediting the development of new polymer materials for electronics and 5G applications. In Life Science, the Group reached a basic agreement with Nobelpharma Co., Ltd. on a business alliance related to manufacturing, development and overseas operations in consideration of future business expansion into the growing biopharmaceutical field and started to build a new factory to expand the patch-type pharmaceuticals business. Regarding advanced research related to these priority development domains, the Group established a Toyo Ink Group Collaborative Research Center within the Tokyo Institute of Technology.
The third policy is to enhance the value of management resources for sustainable growth. The Group implemented the digital transformation (DX) of its business foundation and took specific steps, including the use of material infomatics(MI) in the product development and data visualization for the creation of smart factories. On the ESG front, the Group implemented initiatives to achieve its sustainability vision, TSV2050/2030, and disclosed climate change information based on the TCFD recommendations. The Group developed an environment for increasing diversity and established guidelines for deepening the understanding of LGBT people and supporting them. On the governance front, the Groupchanged to a company with an audit and supervisory committee to enhance the supervisory functions of the Board of Directors. The Group actively reduced its cross-shareholdings to improve capital efficiency.
As a result, net sales for the fiscal year under review rose to 315,927 million yen (up 9.7% year on year). However, profit fell partly due to surges in raw materials prices. Operating profit stood at 6,865 million yen (down 47.2% year on year) and ordinary profit came to 7,906 million yen (down 48.8% year on year). Profit attributable to owners of parent was 9,308 million yen (down 1.9% year on year).
Due to the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc., net sales were 425 million yen less, and operating profit and ordinary profit were 41 million yen and 1 million yen less each, compared with values calculated by applying the previous method.
Operating results by segment are as follows.
2
(Million yen) | ||||||||
Net sales | Operating profit | |||||||
Previous | Term under | Change (%) | Previous | Term under | Change (%) | |||
term | review | term | review | |||||
Colorants and Functional Materials | 74,995 | 79,380 | 5.8 | 5,391 | 1,846 | -65.7 | ||
Related Business | ||||||||
Polymers and Coatings Related | 70,736 | 76,240 | 7.8 | 3,570 | 2,504 | -29.8 | ||
Business | ||||||||
Packaging Materials Related Business | 73,645 | 83,464 | 13.3 | 1,813 | 963 | -46.9 | ||
Printing and Information Related | 66,695 | 75,180 | 12.7 | 1,730 | 654 | -62.2 | ||
Business | ||||||||
Other | 5,746 | 4,948 | -13.9 | 531 | 890 | 67.6 | ||
Subtotal | 291,820 | 319,214 | 9.4 | 13,036 | 6,860 | -47.4 | ||
Adjustment | -3,831 | -3,287 | - | -30 | 5 | - | ||
Total consolidated | 287,989 | 315,927 | 9.7 | 13,005 | 6,865 | -47.2 | ||
(i) Colorants and Functional Materials Related Business
Shipments of LCD color filter materials were very sluggish in the latter half of the fiscal year under review as production of large and small and medium-sized liquid crystal panels was reduced sharply due to a decline in demand for liquid crystal panels for large television sets and smartphones.
Sales of plastic colorants, particularly those for foods containers, remained strong; however, growth in sales of plastic colorants for automobiles and office equipment slowed due to the impact of shortages of semiconductors and other components and lockdowns in China.
Sales of inkjet inks, particularly those for commercial printing and signage, were firm. The Group made progress in the improvement of production facilities for lithium-ion battery materials for automotive applications in the U.S. and Europe, and sales of lithium-ion battery materials expanded as demand increased.
As a result, net sales for this segment as a whole increased to 79,380 million yen (up 5.8% year on year) while operating profit decreased to 1,846 million yen (down 65.7% year on year) due to a steep rise in raw materials and energy costs.
With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 389 million yen and operating profit decreased 2 million yen.
(ii) Polymers and Coatings Related Business
Among functional films and tapes, sales of conductive adhesive sheets and electromagnetic shielding films were affected by a market slump of smartphones in the latter half of the fiscal year under review. Sales of heat durable and low adhesive films for liquid crystal panels and automobiles were slow due to sharp production adjustments in the market.
Domestic sales of adhesives for the packaging of snack foods and pet foods remained strong. Meanwhile, domestic sales of pressure sensitive adhesives for labels and displays were affected by sluggish demand. Overseas sales of pressure sensitive adhesives grew thanks to facility extensions in the U.S. and India and the sales of adhesives for food products and pharmaceuticals were firm.
Domestic sales of new can coatings with added functionality increased, but overall sales of can coatings saw sluggish growth, reflecting weak overseas sales of food can coatings due to low catches of fish.
As a result, net sales for this segment as a whole increased to 76,240 million yen (up 7.8% year on year) while operating profit decreased to 2,504 million yen (down 29.8% year on year) due to steep rises in raw materials and energy costs, more than offsetting selling price revisions and cost reductions.
With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 6 million yen and operating profit decreased 10 million yen.
(iii) Packaging Materials Related Business
In Japan, sales of liquid inks, particularly mainstay products for packaging materials, were steady thanks to firm demand for liquid inks for food products such as frozen foods, labels for beverages, and noodles, based on the movement of customers toward increasing inventory in preparation for the disruption of the supply of materials and price increases. Overseas, shipments in China declined due to lockdowns. However, sales were firm in other regions, reflecting a recovery in economic activity and progress in the expansion of sales.
In the gravure cylinder platemaking business, demand for new plates in the packaging segment was low. Sales of precision platemaking related to electronics saw sluggish growth.
As a result, net sales for this segment as a whole increased to 83,464 million yen (up 13.3% year on year) while operating profit decreased to 963 million yen (down 46.9% year on year) due to difficulty in the procurement of raw materials, a steep rise in their prices, and an increase in energy prices on a global scale.
With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 23 million yen and operating profit decreased 20 million yen.
3
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Toyo Ink SC Holdings Co. Ltd. published this content on 14 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 February 2023 08:19:10 UTC.